As the world continues to evolve with technology, so too does the construction industry, albeit at a much slower rate. Looking back over the last 15 years, it is incredible to think about how much technology has changed in our daily lives. Smartphones weren’t very prevalent and the first generation of the iPhone had just been released. Businesses used fax machines instead of email to transmit information, very few people knew what the cloud was, and drones, as we know them today, didn’t exist.
As it relates to the construction industry, 15 years ago I can remember physically mailing sets of drawings out to people for them to bid jobs and waiting for their faxed bid to come through. People used an actual camera to take pictures, and submittals were wet stamped and mailed to the design team for their review.
All of the efficiencies gained through technology really are fascinating. To... Read More >
In today's construction world, more and more time and resources are spent on scheduling, and with good reason, too. With the high cost of construction loans and general conditions, contractors and developers alike can agree that the sooner we hand over a building the better for all those involved. Project milestones, proper sequencing, and task and crew logic are all scheduling terms that are thrown around on a weekly basis when discussing how we get the job done as soon as possible.
But what if I told you there was something else besides scheduling that can hold up progress on your project just as much as a missing drywall crew or bad schedule logic? Wouldn’t that be something we need to be cognizant of?
I am talking about inspections, of course. Inspections are a necessary step in the construction process to provide a third-party audit that the work meets all code requirements... Read More >
Some developers and investors are unsure about committing to new senior living developments amid rising construction costs and interest rates, while others remain bullish on building new communities figuring that demand will be outpacing supply for the foreseeable future. I have even heard from some clients that they really push to get new developments going in this environment when other potential new projects may be holding off which gives them a leg up in a given market.
One segment that continues to gain steam is active adult according to a recent article in Seniors Housing Business’ April Edition. Active adult communities target those 55 years old and older that are ready to rid themselves of all things associated with home ownership, but are young and healthy enough that they don’t require assistance with daily living activities. These communities are not as labor- or service-based as an assisted living community because they... Read More >
As we move into the rainy season, it’s important to revisit best practices of protecting wood from the elements during construction. Previously, we used to rely on just-in-time deliveries which would limit the amount of time our framing materials were subject to the weather prior to being covered up. With today’s market environment, we find ourselves ordering materials early and storing them on site so that we can be productive as we start building and not run out of material along the way. This has led to lumber being stored for longer periods than we are used to. It’s important that this is taken into consideration as we construct our projects and that we don’t allow deterioration of our building products to occur.
First, develop a plan early to deal with these issues in order to reduce the risk of mold and product deterioration. Ensure that your storage area is well... Read More >
I thought I’d write a blog about some good news, at least for multi-family developers. No, costs aren’t coming down, nor are interest rates. But rents for multifamily are going up! According to rent.com through April 2022 apartment rents nationwide for two bedroom apartments are up 22.8% in a twelve month period. In some areas that are close to us they are up even more. Orlando rents are up 38.2%. Cincinnati is 37.8%.
So while costs are up and interest rates are threatening to rise, rents in many areas more than make up for this, creating opportunity. Rent.com goes on to say that the shortage of supply coupled with increasing demand and increasing inability of people to purchase homes is causing this phenomenon.
Good news for multifamily developers.
... Read More >
Everywhere I go people are asking what’s going to happen with construction prices, and they are right to ask. I visited with a prospective client this month and he told me that construction prices on his prototype increased 46% in two years, which was shocking to him and a little surprising to me. We are tracking prices in our Florida office and our records indicate costs are up 30% in 14 months, 2% per month, so I guess I shouldn’t have been surprised. Everywhere we look subcontractors are backing out of quotes and/or raising prices, and even once under contract don’t always honor prices. Materials and labor availability is a whole other issue. It’s hard to believe these increases can continue, but I don’t see any signs of relief.
The above doesn’t make our jobs any easier or more enjoyable. We hate giving bad news to our clients on costs, but... Read More >
The multi-family market has certainly evolved over the last several years. From the types of amenities renters demand, to an influx of new single family build to rent communities. Not to mention the changing renter demographic. While millennials make up one of the largest rental cohorts, the age 55+ Baby Boomers are selling their homes and opting for a more convenient lifestyle.
According to Forbes, in the last decade, the multifamily market has experienced hyper growth. Even during the pandemic, 2020 saw a 50% increase in multifamily units, compared to that of 2019. Rents in multifamily housing markets have continued to climb. Yardi Matrix reported in February that year over year rent growth increased 15.4% and occupancy rates of 96.9%, surpassing the previous record of 96.5% in 2000.
Today’s renters are demanding more and different amenities. This includes everything from storage areas or lockers for packages, trash valet services, community dog parks... Read More >
Perhaps one of the largest issues builders and developers are currently dealing with is the recent surge in lumber prices coupled with the scarcity of lumber materials. According to Nasdaq’s lumber report, lumber has increased 87% since the beginning of the year, which is a staggering increase. However, what is more, shocking is that lumber had only risen 1.6% from January 1, 2020, to July 1, 2020, but then jumped 85.4% from July 1 to August 20! The cause is a result of diminished supplies coming out of the mills due to Covid-19 related shutdowns. At the same time, demand has remained high due to strong residential housing and multi-family construction markets.
The magnitude of this pricing increase is putting pressures on margins for contractors, builders, and developers and could cause projects to be deferred or canceled should these increases continue into the 4th Quarter. The question on everyone’s mind... Read More >
Last week I was sitting in a presentation with an experienced developer for a project we will be starting soon. This same developer is currently building a facility in Columbus, Ohio, with an institutional contractor, which is not going well.
Over and over, he said, "how much of a pleasure it is to be working with a developer's contractor." We are one, but sometimes I forget what it means. In this case, the client's architects and engineers completed the drawings and added all kinds of things that were nice, but didn't add value to the project or its future residents. With our experience in senior living, we are able to control cost by weeding out what was not required, and we have the technical expertise to communicate effectively with the design professionals with minimal involvement from the client. But there are other things we do, such as keeping up a... Read More >
When you hear the word exoskeleton you probably start thinking of something out of a sci-fi movie like Alien or Avatar, but they are starting to make a presence in construction. Exoskeletons or exosuits are a wearable technology typically made from metal and other fabrics that attach to the body. They are aimed to help lessen the strain on workers' body allowing them to work quickly and safely while reducing injuries. With the potential to reduce required muscle force by as much as 60%, it’s easy to see what kind of an impact this technology could have on workers by easing the physical demands that come with the job. Currently, there are two (2) main types powered and mechanical (passive), and over five (5) main categories for these power suits: power gloves, arm/shoulder support, back support, standing/crouching support. As this technology continues to evolve it will be interesting to see... Read More >
With a continued labor shortage across the country and no signs of change in the near future, some firms are looking to/have implemented robots into their workforce to help combat this issue. Robots in their present capacity are being used to perform repetitive tasks like laying brick, tying rebar, hanging drywall, etc. They are also performing demolition, 3-D printing, and assisting with lifting activities. In 2018 the construction robotics industry was roughly a $23 million market, however, this market is being forecasted to grow to nearly $226 million by 2025 according to the article by Tractica. Some of the benefits being reported by those utilizing robots are increased speed and efficiency, higher levels of safety, and the ability to integrate with design software such as BIM. As one who has never had robotics performing labor on a construction project, I am looking forward to experiencing it and to what impact... Read More >
Construction is an industry obsessed with productivity - And for good reasons. The more productive our field operations, design teams, and management work is, the faster and less expensive the projects are. Unfortunately, construction has suffered from losses in productivity over the last decade, particularly at the field level. Major trades like framing, drywall, and concrete are slipping several percentage points.
This phenomenon is attributable to many factors, but several key ones include:
- Changes in Scope and/or Project Expansion - No matter how well you plan a project, changes happen - And they slow things down. The Independent Project Analysis Group has estimated by a study that more than 35 percent of all construction projects will incur a major change. They've also concluded that any change puts the project at a 1 in 4 risk of schedule slippage by 20% and a 1 in 4 risk... Read More >
With the number of new senior living communities recently opened or currently under construction, there is a growing need to update and refresh existing facilities to help improve their viability in the marketplace.
As new senior housing communities, with all of the latest amenities and design trends, are coming online, older facilities need to position themselves as the better local option. The appearance and freshness of a community can have a significant impact on many aspects of a business. Having an attractive, appealing, and comfortable community can improve resident’s happiness and well-being, increase staff morale, and create a more positive public opinion, all which lead to increased occupancy and better financial performance of the community.
Investing in a renovation project can be a challenging process that can seem overwhelming and complicated. The Douglas Company team has experience in planning and executing renovation projects. We know and understand the unique requirements that skilled... Read More >
As the baby boomer generation begins turning 70, senior living providers will have tremendous opportunities. At the same time, they will face the challenge of reinventing their business and providing innovative solutions to meet the needs and demands of this new generation.
Today’s seniors are looking for options that deliver the comforts and amenities of home. This trend is changing the design and construction of senior living communities. Designers are incorporating more residential design elements and finishes into new buildings, resulting in vibrant and comfortable spaces that are very inviting for residents. The buildings being designed and constructed today are not your father’s senior living facility.
By involving a general contractor very early in the planning process, working collaboratively with the design team, an owner can understand costs, lead times and constructability of various design components, and have the ability to make timely decisions. The general contractor can also provide potential alternative options... Read More >
In the spirit of being a consultant I wanted to discuss a topic that we have seen create frustration and cost money for some developers. Bidding Budgets; or “bidgeting” as we have heard it called. It is when early drawings are put out to multiple General Contractors for the purpose of obtaining their budget estimate which will be utilized to select the contractor for the job. In the beginning, the intent may have been to go with the best OVERALL choice, but in the end, the contractor with the lowest budget estimate is selected to work with going forward. This is not working on a negotiated basis, this is bidding budgets.
There are inherent risks to this process and at the end of the day, it doesn’t necessarily provide you with the best price solution (one of our brand promises by the way) that you were looking to move forward within... Read More >
The management of construction projects has become more difficult in the last several years due to the following key factors:
- Not having adequate, properly trained, manpower available
- Subcontractors not managing their own work
- Higher project finish levels
- Quality and coordination of the design documents
- Increased levels of local and state inspections
- Construction material lead times
All of these factors can contribute to project delays if not addressed by the project team through proactive leadership. The only way proactive leadership can have a positive impact on a project is by the project team following processes on a daily basis to help prevent daily emergencies from impacting and delaying projects. The second most important aspect of proactive leadership is increased communication by the project leaders to help create accountability throughout the project team.
Without a clear path to follow when it comes to managing projects, the task of achieving the desired objectives would prove... Read More >
Recently I read an article by Dodge Data & Analytics regarding the expected rise in green construction globally. According to the article, over half of the 2,000 respondents in The World Green Building Trends 2018 report expect to see 60% of the projects across the globe to be green by 2021. In the US, it is expected to increase from 32% to 45% by 2021.
Some of the reasons for the increase include increased client demands, improving environmental regulations, and healthier buildings for residents. With the expected increase in green construction, interestingly the percentages of projects that get certified are not expected to increase.
Within The Douglas Company’s portfolio, we have built one LEED Silver Certified project, the Department of Veteran Affairs in Fayetteville, NC, and two other Department of Veteran Affairs in Toledo, OH, and Rochester, NY are LEED Silver Equivalent.
Our experience with LEED projects allows The Douglas Company to implement the... Read More >
But what does that mean? It means quite simply that we exclusively work with developers. We do not bid government projects or work with large corporations, retailers, etc. We work with developers to assist them in making their vision become a reality.
Being a developer’s contractor means we have the experience, knowledge, and personnel to get involved early in projects and work on a collaborative basis with the design team and owners. Not everyone plays well with others but when you do it on a regular basis in the conceptual stages like we do, you get good at it and see the positive results it brings to a project and all involved.
If you want a general contractor to sit on the sidelines while drawings are completed and then bid on that final set of drawings you are missing out on a very beneficial strategy to save time (which is, of course,... Read More >
As everyone knows, there is a lot of controversy regarding trade and tariffs. It is impacting the stock markets both domestically and internationally, and dramatically. Recently I have been hearing of subcontractors qualifying their bids in our Florida market for the impact of tariffs, so I decided to do some research to find out what people, including the press, are saying about the impact. In the past year or two, tariffs have been imposed on Canadian lumber, which did affect that pricing. This past summer, tariffs were rendered on Chinese steel, which had a dramatic effect on those prices. The steel increases are interesting, since less than 1% of our domestic steel comes from China, and in fact, we export more steel to China than we import.
But that is in the past. The question has to be, what can we anticipate coming up in the future, and should I be... Read More >
As one of The Douglas Company’s core values, “Peace of Mind” is something that we take very seriously. One of the key components to delivering “Peace of Mind” is timely and effective communication to ensure that clients are not surprised by unexpected events, delays or issues during their project.
While we cannot prevent unexpected events, clients hire The Douglas Company for our ability to foresee potential challenges to their project, keep them informed, and offer a solution to deal with situations before they become a surprise. Many times these are not easy conversations to have with clients, but they are crucial.
Part of The Douglas Company’s on-going training and development program, all of our Project Managers, Assistant Project Managers, Superintendents, Estimating Staff, Business Development and Senior Management will be participating in a 3-hour seminar focused on “Building Better Customer Communication”. Individually and collectively, all of us are committed to enhancing our communication... Read More >